Singapore Exchange (SGX) is preparing to launch Bitcoin perpetual futures in the second half of 2025. According to a Bloomberg report, only institutional and professional investors will be allowed to trade, with retail traders completely locked out.
This follows a global trend of regulated exchanges stepping into crypto derivatives, as demand for Bitcoin exposure keeps rising, mainly thanks to self-proclaimed ‘crypto president’ Donald Trump.
Japan’s Osaka Dojima Exchange, a trading hub with roots going back to the 18th century, also announced plans to seek approval for Bitcoin futures last month.
The Monetary Authority of Singapore (MAS) still needs to approve the perpetual futures before SGX can proceed, and the exchange reportedly wants to act as a bridge between traditional finance and crypto markets.
“This will significantly expand institutional market access,” an SGX spokesperson reportedly told Bloomberg.
Institutional traders turn to perpetual futures
Perpetual futures contracts are a huge part of crypto trading, especially on offshore exchanges, mainly because unlike standard futures, they never expire, letting traders bet on Bitcoin price movements without worrying about contract settlement dates.
These contracts became wildly popular in 2016 after being introduced by crypto exchange BitMEX, which developed a funding rate mechanism to keep prices in line with the spot market.
The Bitcoin derivatives market is massive, with futures trading volume far surpassing spot markets. Traders like Darius Sit, co-founder of Singapore-based QCP Capital, say perpetual contracts have become the go-to method for leveraged trading.
“Perps are pretty much like spot,” Sit told Bloomberg in 2022 amid that nasty crypto winter. “You take less forward risk,” he said, explaining that his firm does almost all of its futures trading in perpetual swaps.
One reason perpetual futures have gotten so popular is the decline of the cash-and-carry arbitrage trade. In Bitcoin futures markets, this strategy allowed traders to profit from price gaps between the spot and futures markets, generating risk-free returns during bullish runs.
But as the market structure changed, those opportunities became less attractive, pushing more traders toward perpetual contracts.
SGX is reportedly trying to address risk concerns by leaning on its Aa2 credit rating from Moody’s, positioning itself as a trusted alternative to offshore crypto exchanges.
The collapse of the FTX exchange, which used to be a leader in perpetual futures trading, left behind a trail of failed exchanges and billions in lost funds, making institutional investors even more cautious about where they trade.
The rise of perpetual futures has completely changed how traders interact with Bitcoin markets. Exchanges use a funding rate mechanism to keep the contracts close to the spot price. When the rate is positive, long traders pay short traders. When it’s negative, short traders pay long traders.
This system mirrors traditional swap contracts and has made perpetual futures the dominant crypto derivatives product. The appeal of crypto derivatives has always been volatility.
Traders looking for high-risk, high-reward opportunities have long favored Bitcoin futures, where price swings can create huge gains—or losses—within minutes. But as markets mature, some traders may start looking for new opportunities with better yield potential.
Meanwhile, other regulated markets have already been experimenting with perpetual products for years. Take Japan Exchange Group, for instance, which launched “rolling-spot” gold futures in early 2022, letting investors gain exposure to gold prices without actually holding physical gold.
In the United States, some exchanges are trying to bring perpetual futures into regulated markets. In October 2024, Chicago-based Bitnomial announced it was building a new platform, Botanical, to launch perpetual Bitcoin futures in the US.
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